Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a703783
Overnight Markets: Wall Street up on hopes of modest stimulus scale back
by Himanshu Singh on Sep 18, 2013 at 03:52
US stocks advanced on Tuesday as Federal Reserve policy makers gathered for a two-day policy meeting and Microsoft Corp. announced a $40 billion buyback.
The Dow Jones industrial average rose 35 points or 0.23%, to 15,530, the S&P 500 gained seven points or 0.42%, to 1,705 and the Nasdaq Composite added 28 points or 0.75%, to 3,746.
The Federal Open Market Committee began meeting on Tuesday to discuss whether to lower quantitative easing. Many investors expect Fed chairman Ben Bernanke will announce a scale-back of purchases by $10 billion a month to $75 billion, while keeping rates close to zero.
In economic reports, US consumer prices barely increased in August, but gains in rents and medical costs pointed to a stabilisation in underlying inflation that could allow the Fed to scale back stimulus.
Adding to the positive sentiment, crude prices continued to fall as a deal averting a US-led attack on Syria calmed fears of a Middle East oil supply disruption. Brent settled down 1.7% to $108.19.
Easing oil prices helped boost airline stocks. Delta Air Lines Inc (DAL.N) gained 0.7% and U.S. Airways Group Inc (LCC.N) surged 3.6% after the stocks were upgraded by JP Morgan to "overweight" ratings.
In the technology sector, Microsoft (MSFT.O) edged up 0.4% after the company said it would raise its quarterly dividend by 22%. Apple (AAPL.O) rose 1.2% after falling more than 11% in the prior five sessions.
Pandora Media Inc (P.N) closed up 5% a day after the company warned that its business growth is slowing and proposed a follow-on offering of 10 million shares.
Shares of Aeropostale Inc (ARO.N) surged 18.1% after Sycamore Partners reported a 7.96% holding in the teen apparel retailer. Safeway (SWY.N) jumped 10.5% after the company adopted a stockholder rights plan.
In Asia, shares gained on Wednesday in morning trade as economists lowered forecasts for monthly reductions in the Fed’s bond-buying programme ahead of the conclusion of its two-day policy meeting today.
News sponsored by: